- Finally, the psychological resistance of the USD/JPY currrency pair was breached as a test tube for Japan regarding the possibility of interfering in the markets, as the USD/JPY jumped towards the 150.47 resistance level, its highest level in a year and stable around it at the time of writing the analysis.
- Therefore, the world's eyes are now turning to Japan to comment on the event.
- As we mentioned many times before, the discrepancy between the US Federal Reserve’s strict policy and the Bank of Japan, which has negative interest rates, alone among the rest of the global central banks that is facing record inflation due to the epidemic and the Russian-Ukrainian war, will remain an important factor for more bulls’ control over the direction of the currency pair.
Positive Data Coming Out from the US
On the future of the exchange rate, The US government is expected on Thursday to report excellent growth for the US economy during the July-September quarter, highlighting the resilience of consumer and business spending despite the Federal Reserve's efforts to cool growth with high interest rates. However, strong growth in the latest quarter is likely to be a high mark for the economy ahead of a steady slowdown that begins in the current October-December quarter and extends through 2024.
Clearly, the Biden administration will certainly use today's report as evidence that its policies have helped stimulate strong growth, even though polls show that most Americans have a poor view of the US president's handling of the economy. Also, Commerce Department figures are expected to show that the country's gross domestic product — the economy's total output of goods and services — grew at an annual rate of 3.8% in the third quarter, according to a survey of economists conducted by FactSet. If accurate, that would mark the fastest quarterly pace in nearly two years and a sharp rise from the 2.1% growth rate in the April-June quarter. However, some economists estimate that annual growth in the fourth quarter could reach 4.5%.
Obviously, The US economy faces other challenges as well, including the rise in longer-term interest rates since July. Also, the average interest rate on a 30-year mortgage is approaching 8%, the highest level in 23 years, putting home purchases out of reach for many Americans.
USD/JPY Trading Outlook Today
There is no change in the general trend of the US dollar against the Japanese yen (USD/JPY), which is bullish. Nearby, the strong bulls’ control increased by breaching the psychological resistance of 150.00 ahead of a package of important and influential economic data led by the announcement of the growth of the US economy, the number of weekly unemployment claims, and orders for durable goods. In general, Japan's ignoring of these upward breakthroughs may give bulls the opportunity to move higher, and the next resistance levels may be 150.85, 151.30, and 152.00, respectively. Finally, we still prefer to sell from those highs rather than risk buying from them.
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